Thursday, April 13, 2006

There's little that workers in the United Arab Emirates can do to improve their lot. Strikes are illegal, although there have been several recently. And because there is no right of association, there are no trade unions.

The Burj Dubai tower is expected to be completed in 2008So when, for example, pay is late, there is little the men can do about it.

The lack of redress also means that smaller grievances - like having to wait an hour at the end of the day to clock off - can suddenly boil over into violence.

However things look as though they might be about to change.

But some things never change. Like attitudes of journalists towards unions. The reporter believes "there is little the men can do about" their grievances with employers because they have not been allowed to form unions. But the real source of the problem is that employers are prohibited by UAE law from entering into contracts that allow the worker to change jobs if the worker becomes dissatisfied. That's one step from indentured servitude. I'm all for voluntary indentured servitude as one option between consenting adults in their right minds. What I am arguing is that government should not prohibit either form of contract: indentured servitude or at-will (where the firm or the work can end the contract at any time).

Why should workers be forced into a collective agreement when alternative means of grievance resolution does a better job and has not been tried? The journalist's bias is to rely on a union. My economist's bias is to rely on individual action. Last time I checked, I was happy my compensation was not determined by a collective agreement, but was determined based on individual merit. Probably you are too, unless you studied economics in France or something.

Allowing workers to change jobs is a low-cost means of enforcement of contract that is based upon each individual worker's action. I assert that many firms would offer such contracts because it would make them more attractive to potential employees. And if you do, then you can offer lower wages or attract better quality workers.

In other words, world criticism of the UAE labor market is a (phony) criticism that exists only because the UAE is giving people better opportunities than they can find in their own countries. Last time I checked, the BBC was not offering these people jobs, let alone offering them jobs with BBC style wages and conditions. Until it does, I suggest these criticisms are misguided and irrelevant. And get this - are BBC workers forced into unions? And if they are, do they not at least have the option of leaving the BBC for another employer?

I don't have plans to nominate either the UAE or Nike as the next Mother Theresa. It's not as if their motives are humanitarian. But the results of their economic initiative to seek out poorly-paid workers elsewhere and attract them to the UAE by giving them a better job than the can get at home is a benefit to humanity. They are on the side of the good; the interests of the UAE and Nike are aligned with The Good.

Unions are one more form of utopianism, and that can put you on The Road to Serfdom. Good intentions can and do produce evil. Something about the best being the enemy of the good.